The Competition Commission of India (CCI) has given the green light for the proposed merger of Tata Motors Finance Limited (TMFL) into Tata Capital Limited (TCL).

What Happened: The CCI made the announcement on Tuesday evening. The proposed merger will see TMFL absorbed into TCL, with TCL remaining as the surviving entity. The merger will be carried out through a scheme of arrangement to be submitted to the National Company Law Tribunal.

TCL, a subsidiary of Tata Sons Private Limited, is a non-banking financial company – investment and credit company (NBFC-ICC). It primarily deals with lending, leasing, factoring, financing, and distributing financial products.

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TMFL, also a NBFC-ICC, is engaged in granting loans and facilities for financing the purchase of new vehicles manufactured by Tata Motors Limited and its group companies, pre-owned vehicles, and refinancing existing vehicle finance loans. It also provides loans and advances to transporters, dealers, and vendors of Tata Motors Limited.

This merger comes on the heels of Tata Motors’ recent strategic moves. In June 2024, Tata Motors’ board approved the incorporation of a wholly-owned subsidiary, TML Commercial Vehicles Ltd (TMLCVL), to house its commercial vehicle business. This move followed the company’s announcement in March of the same year regarding the demerger of its commercial and passenger vehicle segments into two separate listed entities. The purpose of this demerger was to better capitalise on growth opportunities in each segment. The latest merger of TMFL into TCL is another step towards streamlining operations and consolidating the Group’s financial services.

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